The programmatic debate is simplistic, naive and just plain wrong
After the AANA's media transparency event last week, discussions about ad fraud, viewability and programmatic advertising ramped up, but many of the arguments are missing the point. In this guest post, Luke Brown explains that programmatic works - if you focus on outcomes not eyeballs.
Hey guess what? Programmatic can work. It’s the measurement, stupid (with apologies to Bill Clinton).
We watched the headlines emerging from a AANA event last week with growing ire: “Programmatic not working” and “Programmatic biggest problem”.
Nick Manning, chief strategy officer of Ebiquity UK’s presentation at the AANA’s The Media Challenge: Achieving Transparency Effectiveness to Drive Business Outcomes, has clearly generated a necessary discussion, but not all of it’s been helpful.
I’m not here to pick a fight with Nick or the AANA, but I can’t leave this stuff out there unanswered, so here goes. This kind of rhetoric is simplistic, naive and just plain wrong.
For context, I’ve long been a passionate advocate for transparency between agency and client. But the important point is transparency in itself won’t achieve better business outcomes or make programmatic “work”.
At the heart of effective programmatic activity is working to meaningful business goals. Simple right? And scary to think this isn’t standard operating procedure. But unfortunately the practice of setting smart digital goals (particularly ones that reflect business goals) is in short supply across our industry. How do I know this? I’ve been privileged to read hundreds of effectiveness awards entries over the past year and we’re still largely measuring the wrong stuff, setting the wrong goals.
Views, impressions and even clicks aren’t business goals. Most programmatic or any marketing campaigns for that matter will not be effective if they do not lead to a meaningful business goal. It’s a bit bloody obvious, yet this, not transparency, is the nub of the problem when programmatic is supposedly underperforming.
The heated debate around ad viewability and ad fraud is a red herring. Whilst it will no doubt sell a bunch of measurement platforms and consultancy gigs, the real issue with the current media discussion is that it’s stuck in a 20th Century paradigm.
Ad viewability
To date, the method of measurement has been dominated by reach and frequency. The idea that media should only be measured in readership, listenership and viewership is still alive and well. Even if we all know these audience measures are a lot less accurate than they’re purported, but better some measurement than none.
Take these two scenarios:
1. Your measurement shows that one activity with 50% viewability delivers a five times ROI
2. You achieve 90% viewability with a 1.5 times ROI
Which would you continue investing in?
The availability of ‘fake measures’ has blinded many from the real end goal.
Who cares about clicks, impressions and viewability when ultimately it’s about what drives business results?
So whose responsibility is it to start using real measures and getting the most from programmatic (and any other media investment for that matter)? Echoing Manning’s point of view, Sunita Gloster, CEO of AANA, agreed that the onus of effectiveness needs to rest with marketers.
But most marketers and agencies are woefully unprepared to set relevant goals and measure accordingly – let alone then optimise to improve effectiveness.
Measurement and attribution is the answer
A study run by the IAB in October 2016 ‘State of the Industry: Marketing & Advertising Technology’ showed that only half of marketers had an attribution model in place. We’re not talking about a multi-touch attribution model; that’s any kind of attribution at all. What this means is that only half of businesses in Australia can track a basic conversion.
The tools and methodology are available, so why aren’t agencies and clients working to optimise their media purchase decisions to measurable business goals?
One reason is many agencies are doggedly clinging to the old reach and frequency model, and clients are willingly aiding and abetting it. Don’t get me wrong, knowing reach and frequency of your ads is useful but it shouldn’t be the end point any more. The most important question is what do people do next? And then next, and the step after that? What are all the steps required to end up in a sale?
As management consultant and author Peter Drucker once said: “What can be measured, can be improved.” But too few marketers are measuring or working with their agencies to achieve meaningful measurement.
We’ve had the ability to measure conversion along the path to sale and actionable outcomes for some time now. Measurement technology has dramatically leapt forward, but unfortunately most agencies and clients haven’t kept up. And coming from an independent agency, don’t be fooled. This doesn’t have to mean committing large amounts of funds to mar-tech necessarily, it’s more about asking the right questions about what it is you’re trying to achieve and setting out to measure them from the beginning.
Yes, agencies could be more open about where the money is going, but it’s not going to move the needle one iota if the same old thinking is maintained. And perhaps, just perhaps, advertisers may need to get comfortable with paying for head hours and performance fees – because unless great thinking is paid for, it can’t run on good will alone. But that’s a whole other discussion.
So if you want to know if your marketing is stuck in the 20th Century, if you answer ‘yes’ to any of these, then it’s incumbent on you the marketer to urgently reassess your media relationship:
1. The only goals are focused on media metrics, tarps, reach, frequency, viewability
2. Your agency doesn’t ask you to give them access to the systems that measure your path to purchase (CRM, ERP, POS etc)
3. Your agency doesn’t utilise goals that correlate to your business goals
4. Your agency doesn’t give you a single recommendation for how to improve your conversion rates.
5. You have no way to measure online to offline
6. Your agencies ROI forecast would make your CFO laugh (out loud), or worse
7. You’ve never seen an ROI forecast before you undertake a campaign
Luke Brown is CEO of media, CX and advertising agency AFFINITY
topics
AANA
ad fraud
ad viewability
Australian Association of National Advertisers
digital ad viewability
Ebiquity
media transparency
Nick Manning
online viewability
Peter Drucker
Programmatic
Sunita Gloster
transparency
This article is full of fallacious statements but to say fraud is a red herring is the most laughable.
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Attributing conversions to ads that have been seen may lead to a lower ROI, but significantly more sustainable than cookie bombing….. which you seem to be advocating because the ROI is higher.
Those days are well and truly gone…..
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…as it has always been.
But glad you realise that now.
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Luke, I don’t know if you attended the Sydney meeting, but you may not have got the full story. The point I made about programmatic advertising is that the majority of our clients find that it isn’t working for them when measured properly (in terms of its contribution to their business). The return-on-investment can be poor. One reason is that the actual amount of exposure is low due to the high costs of ‘production’ and poor viewability/high non-human content. We do a lot of conversion optimisation work to improve return for performance-based clients, but many clients are looking for less direct measures, and can’t track effect in the same way. Attribution is difficult for performance and even harder for brands who are using online advertising for different reasons.
We do see some advertisers making programmatic advertising work (usually direct response clients) but for the majority, it doesn’t pay back. And this is the experience for many others who, like us, work in the measurement industry.
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Hi Nick,
Appreciate your comments.
No, I wasn’t there on Tuesday, instead I was responding to the way in which your talk was represented in the media, and in the absence of any constructive comment on a more holistic perspective.
It sounds like we’re largely on the same page, that there’s so much more to the programmatic ‘issue’ than transparency.
Irrespective of whether a direct (DR) or indirect (awareness) outcome is desired, my point was that a clear outcome needs to be defined and agreed to before programmatic is earmarked in the media plan. In every case any media decision is made, there has to be a commercial reason for each and every investment. And the kicker is that no business should execute a strategy without measurement of its effectiveness in place – whatever the agreed outcome is. If this all seems a bit obvious, I agree. But clearly it’s not the norm in the industry otherwise more campaigns would be ROI positive.
I agree that brands with protracted purchase cycles such as automotive, consumer electronics or pharmaceuticals certainly pose a challenge for attribution, but effective measures (detailed/specific + responsive/fast) can be found. Sometimes the solution isn’t tech, but boring old fashioned business basics. And yes, it can take effort to do it but from experience I can tell you, it is always possible.
Finally, agree programmatic isn’t the solution for every problem. But when used intelligently in conjunction with well considered outcomes, it can be a powerful business tool to meet a broad range of business goals.
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@NickManning – thanks for this comment. The article which was written about your talk made it seem like your entire talk was about (lack of) transparency and problems with programattic. I didnt know that the majority of your clients find it works for them. You should contact the journalist and ask for an accurate and balanced coverage of your talking points. Otherwise it seems like you are spouting self-serving statements designed to frighten advertisers into using more consulting services (more Ebiquity revenue)
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